It has been a rough road for Bitcoin and the Electronic Frontier Foundation (EFF). A search for “Bitcoin” on the foundation’s website returns a maze of headlines going back to 2010, leading every-which-way. Fortunately, the big announcement made last week is good news: EFF Will Accept Bitcoins to Support Digital Liberty.
The EFF is as much a part of Internet history as “dotcom.” It was founded in 1990, very early in the era of the consumer-based Internet, and the Foundation has proven to be a powerful ally and force to be reckoned with, fighting for users’ rights to privacy, security and freedom of speech. When the organization first started to accept Bitcoin donations it lasted for roughly six months before they backed away in June 2011. The reasons given boil down to the fact that regulations regarding the exchange of digital currencies to fiat were undefined, this uncertainty has been somewhat reduced with the release of the FinCEN guidelines in March of this year.
When the Foundation announced that they would stop accepting Bitcoin donations to avoid stepping into the murky regulatory environment around exchanging bitcoins for fiat, and calling it a day, they promised to give “the Bitcoins that have been accumulated, or that may accumulate in the future, in the account set up in our name to the Bitcoin Faucet, so that they can continue to circulate in the community.”
The recent good news comes with a caveat (in bold text) “EFF is not endorsing Bitcoin” and they go on to explain how the use of any payment processor is not endorsement of said processor. In fact, the third and final reason given for backing away from Bitcoin in the first place was that “People were misconstruing our acceptance of Bitcoins as an endorsement of Bitcoin.” The withdrawal statement goes on to point out, “While we’ve been following the Bitcoin movement with a great degree of interest, EFF has never endorsed Bitcoin.”
Two years is an eternity in the Bitcoin world. At the end of June 2011 when EFF started running the Faucet it was two weeks after the $31 all-time-high and 1 BTC was selling for $16.50 on its way down to $2.25. Since then there has been a monumental swell of investors, entrepreneurs and activists becoming passionate about Bitcoin, generating amazing new ideas, products, services and entire companies that are spreading freedom and economic growth that shows no sign of slowing. The payment processor that EFF is using to receive donations and exchange them expediently, BitPay, is a perfect example of how far the Bitcoin ecosystem has come in that time, it did not launch until July 2011.
The EFF summarized the events of the last two years with a statement that bodes well for the path that Bitcoin is on, “Since then, we’ve been watching the public debate around Bitcoins, seeing the ecosystem develop around them, and conducting our own research on the possible legal issues.”
A lot of the EFF’s victories in the past have taken place in the courts, so it will be interesting to see what role the Foundation will play when the day comes that Bitcoin users are faced with prosecution or that the freedom to use digital currency is threatened by blanket legislation. The EFF could prove to be a powerful ally in a possible knock-down-drag-out crytpo-currency court battle. While this is clearly not an EFF endorsement of Bitcoin as a product or service, a decentralized technology that offers proof of authenticity with pseudo-anonymity could be a valuable tool in the future of free speech. There will hopefully be more details to come from EFF’s on-going investigation, shining more light on which of Bitcoin’s strengths and shortcomings most concern the foundation.